Systems and methods for recalling a previously sold product

ABSTRACT

In accordance with some embodiments, a unit of product is sold by a seller to a buyer at a first price and subject to a recall upon acceptance of a buyout provision. It is then determined that a buyout condition for outputting to the buyer a buyout notification has been satisfied, the buyout notification based on the buyout provision and the buyout notification is output to the buyer, informing the buyer that the seller is interested in recalling the unit of the product and requesting the buyer to define an amount of value for which the buyer is willing to surrender the unit of product (a recall payment amount). If the seller accepts the recall payment amount, the seller recalls the unit of product in exchange for providing the buyer with the recall payment amount.

CROSS-REFERENCE TO RELATED APPLICATIONS

The present application is a continuation of U.S. patent applicationSer. No. 13/769,265, filed Feb. 15, 2013 entitled “SYSTEM AND METHODSFOR RESELLING A PREVIOUSLY SOLD PRODUCT”, which is a continuation ofU.S. patent application Ser. No. 11/456,444, filed Jul. 10, 2006 andissued as U.S. Pat. No. 8,046,247 on Oct. 25, 2011, which is acontinuation of U.S. patent application Ser. No. 10/463,708, filed Jun.17, 2003 and issued as U.S. Pat. No. 7,246,072 on Jul. 17, 2007, whichis a continuation of U.S. patent application Ser. No. 09/260,439, filedMar. 2, 1999 and issued as U.S. Pat. No. 6,658,390 on Dec. 2, 2003. Eachof the above-referenced applications is incorporated by reference hereinin its entirety.

BACKGROUND OF THE INVENTION

The present invention relates to the sale of products. In particular,the present invention relates to a system and method for reselling apreviously sold product.

In general, markets efficiently “clear” a seller's supply of a givenproduct at a price reflective of buyer demand at a particular point intime. When demand is high, the seller can charge a high price for theproduct. When demand is low, on the other hand, the seller must accept alower price for the product.

Demand for the product, however, may increase after the seller's supplyhas been cleared at a low price, resulting in a missed opportunity forprofit. Consider, by way of example, the case of an airline sellingairline tickets. All of the tickets for a particular flight may havebeen sold months in advance for $100 each. At the last minute, however,a surge in demand may result in potential customers offering $200 for aticket on that flight. At this point, the seller can do nothing toprofit from the increased demand.

This consequence is caused by the seller's inability to take back apreviously sold product and then resell it at the higher price. That is,after the product has been sold, the seller is not typically able torescind the transaction simply because demand for the product increases.

Because sales are generally not rescindable, the seller is forced tomake pricing and inventory decisions that are, at best, speculative. Inthe airline industry, two practices have been employed to make optimaldecisions for the seller. The first practice, called “revenuemanagement,” involves the dynamic adjustment of price according toreal-time readings of supply, demand, competitive factors and historicalpurchase trends. The second practice, called “demand forecasting,”involves analysis of historical and projected factors that effect sales,including prior sales, weather patterns and the like. Even when both ofthese concepts are used so that price is a demand forecast factor anddemand forecast data effects price, the predictions still have aninherent margin of error, resulting in lost revenue opportunities.

Another problem with known methods of selling products is thatpurchasers cannot take advantage of an increase in demand. The ticketholder discussed above is not likely to be aware that potentialcustomers are willing to pay $200 for the ticket he or she has alreadypurchased for $100. A potential customer who is willing to pay more fora product that is no longer available from the seller currently has nosimple way to communicate with, for example, ticket holders. Knownmethods of contacting ticket holders, such as through a newspaperadvertisement, are not very effective and incur additional costs, suchas the price of the advertisement.

Thus, a need exists for a system and method that enables sellers, suchas airlines, to capitalize on demand identified after a sale when thevalue of that demand surpasses the value of the demand realized at thetime of the sale.

U.S. Pat. No. 5,253,165 to Leiseca et al. is directed to a computerizedreservation and scheduling system that lets consumers negotiate for, andselect from, pre-scheduled transportation services. The Leiseca patentdoes not address how a transportation provider could resell apreviously-sold transportation product.

Similarly, PCT International Publication Number WO 96/34356 (the “WO'356 reference”) discloses that consumers can use posting terminals tocommunicate with a market maker computer to create a computerized marketfor previously sold goods. The WO '356 reference does not disclose thata product, previously sold, can be resold.

SUMMARY OF THE INVENTION

To alleviate the problems inherent in the prior art, the presentinvention introduces systems and methods for reselling a previously soldproduct.

Many ticket holders would be happy to re-arrange travel plans in returnfor, by way of example, an economic inducement. In the airline examplefrom above, a ticket holder may be happy to accept a ticket for adifferent date and a $50 coupon in return for giving up a seat. In thiscase, the airline could still earn an extra $50 profit ($200 receivedfrom the subsequent purchaser−$100 cost of the replacement ticket−$50paid to the original purchaser).

In one embodiment of the present invention, a seller, having previouslysold a product to an original purchaser subject to a buyout-provision,determines if the buyout-condition is satisfied. If the buyout conditionis satisfied, the seller recalls the product from the original purchaserand resells the product to a subsequent purchaser.

With these and other advantages and features of the invention that willbecome apparent, the nature of the invention may be more clearlyunderstood by reference to the following detailed description of theinvention, the appended claims, and to the several drawings attachedherein.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram overview of a system for reselling apreviously sold product according to an embodiment of the presentinvention.

FIG. 2 is a block schematic diagram of the seller device shown in FIG. 1according to an embodiment of the present invention.

FIG. 3 is a tabular representation of a portion of the inventorydatabase shown in FIG. 2 according to an embodiment of the presentinvention.

FIG. 4 is a tabular representation of a portion of the originalpurchaser database shown in FIG. 2 according to an embodiment of thepresent invention.

FIG. 5 is a tabular representation of a portion of the triggeringconditions rules database shown in FIG. 2 according to an embodiment ofthe present invention.

FIG. 6 is a flow chart illustrating a method of reselling a previouslysold product at the seller's discretion according to an embodiment ofthe present invention.

FIGS. 7A and 7B are a flow chart illustrating a method of reselling apreviously sold product at the original purchaser's discretion accordingto an embodiment of the present invention.

DETAILED DESCRIPTION

The present invention is directed to systems and methods for reselling apreviously sold product. Turning now in detail to the drawings, FIG. 1is a block diagram overview of a system for reselling a previously soldproduct according to an embodiment of the present invention. The systemincludes a number of seller devices 100 coupled to a number of buyerdevices 200 through a communication network 300. The buyer devices 200may be, for example, Personal Computers (PCs), Personal DigitalAssistants (PDAs), wired or wireless telephones, or any othercommunication device. The communication network 300 may be, for example,a Local Area Network (LAN), a wireless network, a Public SwitchedTelephone Network (PSTN), or an Internet Protocol (IP) network such asthe Internet, an intranet or an extranet. By way of example only, theseller device 100 may be a Web-based server communicating with a numberof PCs through the Internet.

According to an embodiment of the present invention, a seller using aseller device 100 resells a “product” previously sold to an originalpurchaser. As used herein, the product may be any good or serviceprovided by the seller. The product may also be the right to use aservice provided by the seller, as in the case of an airline ticket.Other types of products include hotel rooms, car rental services,concert and other event tickets, and consumer electronic devices.

When the seller initially sells the product to an original purchaser,the sale is made subject to a “buyout provision.” That is, the originalpurchaser agrees, at the time of the original sale, that the seller hasthe right to recall the product at a later point in time. According toanother embodiment of the present invention, the original purchaser isinformed that the seller may offer to recall the product at a laterpoint in time, subject to the original purchaser's acceptance of abuyout offer.

The buyout-condition may be, for example, associated with a subsequentoffer for the product from a subsequent purchaser, perhaps at a level ofcompensation above a threshold compensation level. For example, if anairline ticket was sold to the original purchaser for $500, thebuyout-condition may be associated with the airline receiving asubsequent offer of $550 for a ticket on that flight. According toanother embodiment of the present invention, the buyout-condition mayinstead be triggered when product inventory falls below a thresholdinventory level. Of course, many different factors, and combinations offactors, may be used to create a buyout provision.

To encourage customers to accept buyout-provisions, the seller mayoffer, for example, a discounted original purchase price, a promise thatany recalling will only be performed if the original purchaser accepts abuyout offer, a promise of a discount on a future purchase, or apredetermined minimum compensation to be provided if the recalling isperformed. The predetermined minimum compensation may be, for example, aminimum refund, a minimum substitute product, or a promised minimumdiscount on a future purchase. According to one embodiment of thepresent invention, a customer may choose between a number of differentbuyout-provisions, each having a different set of inducements. Forexample, more encouragement may be given to customers willing to be thefirst ones to relinquish (to be “bumped”). Likewise, each customer maybe allowed to set his or her own “threshold,” as in: “I am willing to be‘bumped’ if I receive $100 back in addition to the price I paid for theticket.”

According to an embodiment of the present invention, after the originalsale, the seller device 100 determines if the buyout-condition issatisfied. The determination may include the evaluation of, for example,an actual or estimated product inventory, an actual or estimated demandfor the product, or an actual or estimated profit if the product isresold. The determination whether the buyout-condition is satisfied maybe performed either periodically or upon a change in a variableassociated with the buyout-provision. According to another embodiment ofthe present invention, the determination may be “automatically”performed by the seller device 100. As used herein, the terms“automatic” and “automatically” refer to actions that are not performedin an entirely manual way. According to another embodiment of thepresent invention, the determination may be made manually, on an ad hocbasis, by an operator of the system. According to still anotherembodiment of the present invention, the determination may be“dynamically” performed by the seller device 100. As used herein, theterms “dynamic” and “dynamically” refer to actions that are performedsubstantially in real-time.

A determination whether the buyout-condition is satisfied may alsoinclude an evaluation of the profit that will be made by the seller ifthe product is resold. For example, consider a product that waspreviously sold at an original purchase price and may be resold at asubsequent purchase price. In this case, the seller may decide to recallthe product only if the subsequent purchase price is greater than theoriginal purchase price. In another example, a buyout-provisioncondition may only be satisfied if subsequent purchase price >price ofsubstitute product. The determination may also include evaluatinginformation in, for example, an inventory database, an originalpurchaser database, or a buyout-provision condition database. In thecase of an airline, a subsequent purchaser may be asked to redeemfrequent flier miles in order to “bump” the original purchaser. If thebuyout-condition is satisfied, the seller recalls the product from theoriginal purchaser.

According to one embodiment of the present invention, depending on theterms of the original sale, the seller may have the right to recall theproduct with the consent of the original purchaser. Recalling theproduct includes either (i) taking the product from the originalcustomer, or (ii) voiding the original customer's product.

According to another embodiment of the present invention, the seller mayinstead provide a “buyout offer” to the original purchaser when thebuyout-condition is satisfied. In this case, the product is not recalledunless the original purchaser accepts the buyout offer. The buyout offermay include, for example, an offer of a refund, a substitute product, ora promise of a discount on a future purchase. For example, an airlinemay provide a ticket holder with a buyout offer including a substituteticket on an alternate flight, along with a number of bonus frequentflier miles, in return for giving up a ticket.

The buyout offer may be sent from the seller device 100 to the buyerdevice 200 through the communication network 300. The buyout offer mayalso be sent to a number of different buyers. For example, the sellerdevice 100 may send an e-mail to a number of ticket holders. In thiscase, the first ticket holder to accept the offer may terminate theoffer with respect to the other ticket holders. According to anotherembodiment of the present invention, a particular buyout offer may besent to a subset of all possible ticket holders, perhaps based on aticket holder's frequent flier status or the price the ticket holderpaid for the ticket. Likewise, different buyout offers with differentterms, such as different offers of compensation, may be sent todifferent subsets of ticket holders.

When the seller recalls the product from the original purchaser, theseller may compensate the original purchaser, such as by providing arefund or substitute product, or the compensation may be provided at alater time. After the seller recalls the product from the originalpurchaser, the product can then be resold to a subsequent purchaser.According to another embodiment of the present invention, this may bedone by transferring the product directly from the original purchaser tothe subsequent purchaser.

According to still another embodiment of the present invention,information about a product recalling and reselling may be stored in adatabase, such as a product resale database, to help set, for example,buyout_(:)conditions and buyout offers in the future. The informationmay include, for example, a compensation received by the originalpurchaser (including any promise or minimum compensation provided to theoriginal purchaser in exchange for having the original sale subject tothe buyout-condition). The information may also include a buyout offerthat was accepted by the original purchaser (including any refund,substitute product, promise of a discount on a future purchase, or othercompensation included in the buyout offer), a compensation provided tothe original purchaser in exchange for recalling the product, acompensation received from the subsequent purchaser, or how thebuyout-condition was satisfied.

FIG. 2 is a block schematic diagram of the seller device 100 shown inFIG. 1 according to an embodiment of the present invention. The sellerdevice 100 includes a processing module 110 with a Central ProcessingUnit (CPU) 120 coupled to: a clock 160; a network communication port150, which in turn is coupled to a network (not shown in FIG. 2); and“memories” comprising a Random Access Memory (RAM) 130 and a Read OnlyMemory (ROM) 140 and a storage device 400. An input device 170 and anoutput device 180 are also coupled to the CPU 120.

The memories 130, 140 and 400 may store instructions adapted to beexecuted by the CPU 120 to perform at least one embodiment of thepresent invention. For example, when a seller has previously sold aproduct to an original purchaser subject to a buyout-provision, thememories 130, 140 and 400 may store instructions adapted to be executedby the CPU 120 to determine if the buyout-condition is satisfied. If thebuyout-condition is satisfied, the CPU 120 may the recalling of theproduct from the original purchaser and the reselling of the product toa subsequent purchaser.

For the purposes of this application, the memories 130, 140 and 400could include any medium capable of storing information and instructionsadapted to be executed by a processor. Some examples of such mediainclude, but are not limited to, floppy disks, CD-ROM, magnetic tape,hard drives, and any other device that can store digital information. Inone embodiment, instructions are stored on the medium in a compressedand/or encrypted format. As used herein, the phrase “adapted to beexecuted by a processor” is meant to encompass instructions stored in acompressed and/or encrypted format, as well as instructions that have tobe compiled or installed by an installer before being executed by theprocessor.

As shown in FIG. 2, the storage device 400 contains an inventorydatabase 500, described in detail with respect to FIG. 3. The storagedevice 400 also contains an original purchaser database 600, describedin detail with respect to FIG. 4, and a triggering conditions rulesdatabase 700, described in detail with respect to FIG. 5. According toan embodiment of the present invention directed to reselling airlinetickets, the storage device 400 may also contain, for example, adatabase (not shown in FIG. 2) that stores prior sales data for specificseats. This data may be used to make future pricing decisions, such asrevenue management decisions, and to set optimal triggering conditionsfor buyout-provisions.

FIG. 3 is a tabular representation of a portion of the inventorydatabase 500 shown in FIG. 2 according to an embodiment of the presentinvention directed to reselling airline tickets. As shown in FIG. 3, theinventory database 500 has multiple data categories. For example, theinventory database 500 may include a flight identifier 510, flightcharacteristics 520, a seat type 530, a seat number 540, an availability550, a retail price 560, a demand forecast 570, and a current demand580.

FIG. 4 is a tabular representation of a portion of the originalpurchaser database 600 shown in FIG. 2 according to an embodiment of thepresent invention directed to reselling airline tickets. The originalpurchaser database 600 may be used to store all original purchasers whohave previously agreed to either automatically relinquish or be providedwith refund offers. As shown in FIG. 4, the original purchaser database600 may include a customer identifier (such as a credit card number)610, a product purchased (such as a flight number and seat number) 620,an original purchase price 630, a buyout provision 640, a refund 650, astatus 660, and contact information 670. The contact information 670 maybe, for example, an e-mail address or a telephone number that can beused to send a buyout offer to an original purchaser.

Note that the buyout-provision 640 stored in the original purchaserdatabase 600 may indicate that the buyout-provision is“owner-discretion.” In this case, the original purchaser may be notifiedand asked if he would like to relinquish his ticket. This decision maybe based on the amount of pecuniary refund that is offered to theoriginal purchaser. For example, a subsequent purchaser may submit anirrevocable Conditional Purchase Offer (CPO), as defined, for example,in U.S. Pat. No. 5,794,207 to Walker et al., the entire contents ofwhich are hereby incorporated by reference. Such a CPO could specify anoffer to purchase a ticket at a price 25% higher than the originalpurchaser paid. This makes it possible for the original purchaser toprofit from the recalling. The original purchaser's decision may also bebased on his or her ability to get a similar alternate flight. Forexample, the original purchaser who purchased a coach ticket to aparticular city may be willing to relinquish that coach ticket for afirst class ticket to a nearby city.

The buyout-provision 640 may also indicate that the buyout_(:)provisionis “seller-discretion.” In this case, the airline may void, recalland/or transfer a ticket sold to an original purchaser without ownerconsent. The original purchaser may have, for example, received asubstantial discount in order to accept the possibility that he or shewould later relinquish his or her place on the flight. The originalpurchaser database 600 may also store conventional ticket sales (i.e.,sales that are not subject to a buyout-provision), in which case thebuyout-provision 640 may simply indicate “n/a.” Likewise, a conventionalticket sales database (not shown in FIG. 4) can be modified to handleinformation used in accordance with various embodiments of the presentinvention.

The status information 660 stored in the original purchaser database 600may indicate that the buyout offer has been accepted, or “exercised,”and that the ticket issued to the original purchaser is now “void.” Suchinformation might prevent an airline from over-redeeming buyout offers.

FIG. 5 is a tabular representation of a portion of the triggeringconditions rules database 700 shown in FIG. 2 according to an embodimentof the present invention directed to reselling airline tickets. As shownin FIG. 5, the triggering conditions rules database 700 may include aproduct purchased 710 and a set of triggering conditions 720. The “X”used in the product purchased 710 indicates a seat number in a series.That is, “1X” represents seats 10 through 19, which may be, for example,first class seats. The set of triggering conditions 720 may include, forexample, a requirement that a “subsequent purchaser [is] identified.”This may be satisfied directly or indirectly through the receipt of asimple price inquiry or a ticket request from a subsequent purchaser viatelephone, an e-mail, a Web page or a system operator. A subsequentpurchaser may instead submit an offer, such as an irrevocable CPO, tothe system indicating his willingness to purchase a product similar tothe original purchaser's product for a buyer-defined price.

FIG. 6 is a flow chart illustrating a method of reselling a previouslysold product at the seller's discretion according to an embodiment ofthe present invention. The flow chart in FIG. 6, as well as the otherflow charts discussed herein, are not meant to imply a fixed order tothe steps; an embodiment of the present invention can be practiced inany order that is practicable. The process may be executed periodically,continuously, or upon a change in a triggering condition, such as achange in demand, as described with respect to FIG. 5.

As shown in FIG. 6, at step 802 it is determined, for a given product,if requisite triggering conditions are satisfied. For example, it may bedetermined if (1) a subsequent purchaser has been identified, (2) thereis no comparable seat available for the subsequent purchaser, (3) thereis a suitable alternative available for the original purchaser or (4)actual demand is higher than the forecast demand. If the triggeringcondition is not satisfied at step 802, the process ends at step 804.

If the triggering condition is satisfied at step 802, the correspondingstatus 660 in the original purchaser database 600 is updated to“exercised/void” at step 806. At step 808, the availability 550 of theproduct is updated in the inventory database 500. For example, where thetriggering condition is simply an increase in demand, the availability550 may be increased from “0” to “1” to open up more supply to meet theincreased demand. If the triggering condition is an identifiedsubsequent purchaser, the availability 550 may not be updated, and thenewly available ticket may be transferred directly to the identifiedsubsequent purchaser.

If no refund is due to the original purchaser at step 812, the processends at step 804. If a refund is due to the original purchaser at step812, the refund, such as a substitute ticket, is provided to theoriginal purchaser at step 812 before the process ends at step 804.

FIGS. 7A and 7B are a flow chart illustrating a method of reselling apreviously sold product at the original purchaser's discretion accordingto an embodiment of the present invention. As shown in FIG. 7A, at step902 it is determined, for a given product, if requisite triggeringconditions are satisfied. If the triggering conditions are notsatisfied, the process ends at step 904.

If the triggering conditions are satisfied, the original purchaser ofthe product is identified at step 906 using the original purchaserdatabase 600. At step 908, the original purchaser's contact information670 is retrieved and a buyout offer is transmitted to the originalpurchaser at step 910. If the original purchaser declines the buyoutoffer at step 912, the process ends at step 914.

If the original purchaser accepts the buyout offer at step 912, theprocess continues as shown in FIG. 7B. At step 916, the correspondingstatus 660 in the original purchaser database 600 is updated to“exercised/void”. At step 918, the availability 550 of the product isupdated in the inventory database 500. If no refund is due to theoriginal purchase at step 920, the process ends at step 922. If a refundis due to the original purchaser at step 920, the refund, suchsubstitute ticket, is provided to the original purchaser at step 924before the process ends at step 926.

Thus, the present invention enables a product, previously sold to anoriginal purchaser subject to a buyout-provision to be resold to asubsequent purchaser. Such an arrangement can benefit both a seller andthe original purchaser, who may now profit from the resale. The presentinvention can also benefit the subsequent purchaser, who may purchase aproduct that would not otherwise be available.

The present invention has been described in terms of several embodimentssolely for the purpose of illustration. Persons skilled in the art willrecognize from this description that the invention is not limited to theembodiments described, but may be practiced with modifications andalterations limited only by the spirit and scope of the appended claims.

What is claimed is:
 1. An apparatus for facilitating a recall of apreviously sold product, the apparatus comprising: a processor; a memoryoperable to communicate with the processor, the memory storing a programfor controlling the processor, the program comprising a process whichwhen executed by the processor causes to processor to: determine that aunit of product has been sold by a seller to a buyer at a first price,wherein the unit of product is sold subject to a recall upon acceptanceof a buyout provision; determine that a buyout condition for outputtingto the buyer a buyout notification has been satisfied, the buyoutnotification based on the buyout provision; cause the buyoutnotification to be output to the buyer, the buyout notificationinforming the buyer that the seller is interested in recalling the unitof the product subject to the buyout provision and requesting the buyerto define an amount of value for which the buyer is willing to surrenderthe unit of product; receive, from the buyer, an indication of an amountof value in exchange for which the buyer is willing to surrender theunit of product, thereby determining a recall payment amount as definedby the buyer; determine that the recall payment amount is acceptable tothe seller; and recall the unit of product from the buyer in exchangefor the recall payment amount as defined by the buyer.
 2. The apparatusof claim 1, wherein determining that a buyout condition for outputtingto the buyer the buyout notification has been satisfied comprisesdetermining an inventory level of units of product.
 3. The apparatus ofclaim 1, wherein the amount of value is a minimum amount of value. 4.The apparatus of claim 1, wherein the unit of product being sold subjectto a recall upon acceptance of a buyout provision comprises the unit ofproduct being sold subject to a recall of the unit upon acceptance, bythe seller, of a recall payment amount as defined by the buyer, suchthat determining that the recall payment amount defined by the buyer isacceptable to the seller comprises the seller accepting the buyer'soffer to surrender the unit of the product in exchange for the recallpayment amount, thereby satisfying the recall provision.
 5. Theapparatus of claim 1, wherein the indication of the recall paymentamount is received from the buyer after the buyer purchases the unit ofproduct and after the buyout notification is output to the buyer.
 6. Theapparatus of claim 1, wherein the recall payment amount comprises atleast one of (i) an amount of money, (ii) an amount of credit usable topurchase another product from the seller, (iii) a number of frequentflyer miles, and (iv) a substitute product available from the seller. 7.The apparatus of claim 1, wherein the process when executed by theprocessor further causes to processor to: track a value of a variableassociated with units of product sold to the buyer; and whereindetermining that a condition for outputting to the buyer a notificationof the buyout provision has been satisfied comprises determining thatthe value of the variable has changed to a predetermined value.
 8. Theapparatus of claim 1, wherein the unit of product is a reservation for aseat on an airline flight.
 9. The apparatus of claim 8, whereinrecalling the unit of product comprises cancelling the reservation forthe seat.